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From Home Furnishing Business
Big Lots Reports Better Than Expected 2nd Quarter Financial Results
August 29,
2023 by HFBusiness Staff in Business Strategy, Industry 
Big Lots, Inc. today reported a net loss of $249.8 million, or $8.56 per share, for the second quarter of fiscal 2023 ended July 29, 2023. This result includes a net after-tax charge of $155.4 million, or $5.32 per share, associated with the net impact of synthetic lease exit costs, forward distribution center closure costs, adjustments to impairment charges, a gain on the sale of real estate and related expenses, consulting fees related to the company's cost reduction and productivity initiatives, and a valuation allowance on deferred tax assets.
Excluding this charge, the adjusted net loss in the second quarter of 2023 was $94.4 million, or $3.24 per share (see non-GAAP table included later in this release). The adjusted net loss for the second quarter of fiscal 2022 was $66.0 million, or $2.28 per share.
Net sales for the second quarter of fiscal 2023 totaled $1.139 billion, a 15.4% decrease compared to $1.346 billion for the same period last year. The decline to last year was driven by a comparable sales decrease of 14.6%.
A net decrease in store count, partially offset by new stores and relocations, contributed approximately 80 basis points of sales decline compared to the second quarter of 2022.
Commenting on today's results announcement, Bruce Thorn, president and CEO of Big Lots stated, "Our results for Q2 illustrate that we remain in a very challenging environment, in which our core lower-income customer remains under significant pressure and has limited capacity for higher-ticket discretionary purchases.”
“However, we did see some sequential improvement in the quarter, and were pleased to come in ahead of or in line with our guidance on all key metrics. We believe this improvement was driven by the five key actions we have taken, which are to own bargains, communicate unmistakable value, increase store relevance, win with omnichannel, and drive productivity."
"While the consumer environment will likely remain challenging and result in negative comp sales in the back half of the year, we are now in a position to get back to playing offense. This will be supported by the incredible efforts of our associates, and our outstanding vendor partners, who remain aligned with our efforts to offer great quality products and amazing value.”
“As we make further progress on our five key actions, we are optimistic that trends will continue to improve, albeit slowly, through the remainder of this year, aided by a higher penetration of bargains, more newness in our assortment, freight reductions, ongoing cost reduction and productivity efforts, more effective promotions, and a more normalized level of markdowns."
"On the cost reduction and productivity front, we are well on track to achieve our structural SG&A savings goal of over $100 million in 2023. In addition, we have a clear path to over $200 million of additional bottom-line opportunities across gross margin and SG&A, and we expect a high proportion of these benefits to be realized on a run-rate basis by the end of 2024."
"Turning to liquidity, we are very comfortable with our position coming into the second half of the year. We significantly strengthened our balance sheet by closing the $294 million sale/leaseback deal on August 25, the proceeds from which were not included in our quarter-end liquidity of $258 million.”
“Combined with our efforts to aggressively manage costs, inventory, and capital expenditures, we are prepared and positioned to navigate through the current economic challenges."
"Overall, we are excited to see signs of improvement across multiple fronts and are confident that our five key actions will translate into continued sequential improvement in financial performance as the year progresses."